Sterling Partners Investment Thesis Challenge Investment Areas of Focus for Participating Firms

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Sterling Partners Investment Thesis Challenge

Investment

Areas

of

Focus

for

Participating

Firms

Sterling

Partners

www.sterlingpartners.com

Overview

Sterling Partners is a private equity and venture capital firm specializing in growth capital and buyout

investments in small and middle market private companies. It typically invests in education, health care,

business services, direct marketing, specialty manufacturing and distribution, and technology companies. It has

a total staff of 75, six funds with ~$5B in AUM, and 30 portfolio companies.

Sterling Partners makes control investments (e.g. more than 50 percent) in cash‐flow‐positive companies (e.g.

growth capital not venture capital) that have proven business models and do not take technology risk.

Investment areas of interest for SPITC:

 Education: The world has never been hungrier for educational services that deliver on their promise. We

have proven for over three decades that world‐class student outcomes and value creation are not

mutually exclusive.

 Health Care: There are a lot of fish swimming in this 2.5 trillion dollar pond. Only those that consistently

deliver quality and value to patients or lower cost to the system will have staying power.

 Business Services: This large addressable market is full of differentiated B2B players that will matter in

all economic climates. We have partnered with many of them over the years, and we’re looking for

more.

See our portfolio companies in each of these investment areas: www.sterlingpartner.com.

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Baird

Capital

www.bairdcapital.com/bairdcapital/us

‐

private

‐

equity

Overview

For 25 years, Baird Capital’s US Private Equity team has made private equity investments in US‐based lower

middle‐market companies. We focus exclusively on the health care, technology and services, and

industrial/commercial products industries. We partner with exceptional operators and leverage our global

perspective, knowledge sharing, and executive networks to strive to build exceptional companies. We also

provide operational support to our portfolio companies through teams on the ground in Asia, a proactive

portfolio operations team and a deep network of relationships which together deliver enhanced value. Investment areas of interest for SPITC:

Technology and Services

 Marketing and data services  Human capital services  Insurance distribution services  Franchising

 Professional services

Health Care

 Infection prevention and management  Health care marketing and communications  Outsourced hospital/provider services and tools  Revenue cycle management

 Rehabilitative care Industrial/Commercial Products  Process controls  Specialty packaging  Water infrastructure  Safety products

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Flexpoint

Ford,

LLC

www.flexpointford.com

Overview

Flexpoint Ford is a Chicago‐based private equity group focused on investments in financial services and

healthcare. The firm was founded in 2005 and currently manages approximately $1.0B of committed equity

capital. Flexpoint Ford seeks to build relationships with executives and companies who look for the firm to be a

value‐added partner. Flexpoint Ford aims to invest $25M to $125M of equity in each opportunity.

Financial Services

 Areas of focus include: specialty finance, insurance, insurance services, transaction processing, asset

management, broker/dealers, trading technology, financial technology  Representative current and past portfolio companies include:

‐ GeoVera Insurance Group Holdings: provider of specialty residential property insurance with a focus

on catastrophe exposed property in the homeowners and residential earthquake markets, operating

in both admitted and surplus lines markets

‐ Wisdom Tree Investments (Nasdaq: WETF): independent exchange‐traded fund sponsor, securities

index developer, and asset manager with $17.2B of assets under management

‐ Financial Pacific Leasing: specialized commercial finance company focused on providing leases for

essential business equipment to small businesses nationwide

‐ T&H Global Holdings: provider of specialized insurance claims services to insurance carriers,

insurance brokers, corporations, and public entities

‐ Retail Capital:provider of small business lending solutions through an emerging platform focused on

data science and analytics

‐ Great Ajax REIT: Real Estate Investment Trust focused primarily on acquiring, investing in, and

managing a portfolio of single‐family re‐performing and non‐performing first lien mortgage loans ‐ Pelican Auto Finance: originates used car loans to “deep subprime” borrowers through a network of

independent auto dealers, primarily in the Mid‐Atlantic, Texas, and Ohio. Pelican services all loans

in‐house and uses GPS and starter interrupt technology to enhance its collection activity and track

its underlying collateral

‐ Flexpoint MCLS Holdings: formed in 2014 to invest in an existing Small Business Investment

Corporation predominately originating life sciences loans to late development‐stage and early

commercialization‐stage pharmaceutical, biotech, and medical device companies

‐ Jefferson Capital: acquirer and servicer of delinquent portfolios of consumer accounts, secured and

unsecured consumer bankruptcies, and balance transfer program solicitations

‐ ARX Holding Corp: insurance holding company which, through its group of insurance companies

known as American Strategic Insurance, provides residential property coverage in 21 states with an

emphasis on the Southeast US

‐ Hilltop Holdings (NYSE: HTH): a publicly‐traded financial holding company that is a regional

commercial banking franchise through its wholly owned subsidiary PlainsCapital Corporation

Health Care

 Areas of focus include: health care providers, managed care, outsourced services and technology,

distribution, pharmaceuticals and life sciences, and medical devices and supplies  Representative current and past portfolio companies include:

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‐ Corva: provider of renal care to patients with chronic kidney disease and end stage renal disease ‐ Eagle Hospital Physicians: practice management company providing hospitalist contract services,

telemedicine, and hospitalist temporary staffing

‐ American Medical Depot: distributor of medical and surgical supplies

‐ Home Solutions: home infusion pharmacy offering a full range of intravenous and other specialty

therapies, focused in nutritional support, cardiac care, and pediatrics

‐ IntegraCare Home Health: home nursing and hospice provider based in Texas

‐ Senior Whole Health: managed care organization serving the Massachusetts dual‐eligible

Medicare/Medicaid population

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GTCR

www.gtcr.com

Overview

One of the oldest private equity firms in the US

–Founded in 1980, GTCR has invested $10B over its history

–Invested successfully in different economic environments

–Currently investing $3.85B Fund XI

The Leaders StrategyTM positions GTCR to pursue differentiated opportunities  Under‐managed Assets

‐ Expand geographic, customer, or product reach

‐ Bring cost synergies

‐ Facilitate more efficient capital structures

‐ Can be executed at accretive valuations

‐ Bring world‐class management leadership to lower‐middle market companies

 Transformational Acquisitions

‐ Identify and acquire non‐core assets from corporate enterprises ‐ Create stand‐alone enterprise and reposition within industry

‐ Accelerate growth by improving sales execution

‐ Improve efficiency by focusing on performance metrics

‐ Upgrade infrastructure and operations to position for public/strategic exit

 Health Care

‐ Health care providers ‐ Managed care

‐ Medical devices

‐ Outpatient services

‐ Pharmaceuticals/life sciences

 Information Services and Technology

‐ Software and online services

‐ Telecom and networks

‐ Data and info services

‐ Government services/aerospace and defense

‐ Media

 Financial Services and Technology

‐ Financial technology

‐ Transaction processing

‐ Asset management and distribution

‐ Financial institutions

‐ Insurance, insurance services, and distribution  Growth Business Services

‐ Security alarm monitoring

‐ Business process outsourcing

‐ Logistics and distribution

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Jump

Capital

www.jumpcapitalpartners.com

Overview

Jump Capital is a Chicago‐based venture capital firm specializing in expansion stage and growth capital

investments. Led by a team of experienced operating executives, we are value creators who take an

opportunistic, long‐term approach to investing. We seek investment opportunities ranging from $2mm to

$15mm in scalable technology businesses with compelling leadership teams across a wide breadth of industries

including enterprise technology, marketing, healthcare IT, and financial services.

Jump Capital takes an opportunistic approach to investing. Unlike most venture capital or private equity funds

we take a long‐term approach and are not limited by a fixed fund life or narrow investment mandates. We seek

great people and ideas within attractive markets. Although our investments are not industry or sector focused,

we are enticed by opportunities that exhibit these attributes:

 Asset‐light businesses with B2B sales strategies  Technology‐driven businesses

 Recurring revenue streams

 Compete in niche or defensible market segments  Go‐to‐market strategies that leverage channel sales

Areas of particular interest include:

 Financial technology

 IT security (enterprise and mobile)  Health care IT and services

 Cloud computing and data storage

 Machine‐to‐machine data (the “industrial internet”)

 Automation of knowledge work using big data and machine learning  Agriculture technology

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Madison

Dearborn

Partners

www.mdcp.com

Overview

MDP is a private equity investment firm based in Chicago. Since MDP’s formation in 1992, the firm has raised six

funds with aggregate capital of over $18B and has completed approximately 120 investments. MDP’s founders

adopted an industry‐focused investment approach over 30 years ago, and the firm has five dedicated teams that

have long and successful track records of investing in their respective sectors. The five industry verticals are:

basic industries, consumer, financial services, health care, telecom, and media and technology services.

 Health care Services

‐ Home care technologies (staffing, pharma usage)

‐ Hospital and post‐acute outsourcing (separate from revenue cycle management, other tech or

service related); or purchasing interfaces on supplies and contracting

‐ Pharma clinical trials development (e.g., physician groups are circumventing traditional Clinical

Research Organizations)

‐ Disease management, case management for certain morbidities

‐ Management of dual eligible populations (Medicare and Medicaid) – where costs are high and

payers/providers are not coordinated ‐ Medical products and device manufacturers ‐ Specialty pharmaceutical companies

‐ Life science and medical products distributors ‐ Dental products and technology manufacturers

‐ Home health care and community based human service providers ‐ Managed care and specialty managed care providers

‐ Specialized health care service providers, including diagnostic laboratories, kidney dialysis chains,

and hospital outpatient surgery centers ‐ Health care information technology companies

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PSP

Capital

Partners,

LLC

www.pspcapital.com

Overview

PSP Capital Partners is a private investment firm founded by Penny Pritzker dedicated to building businesses and

creating long‐term value across the globe in close partnership with entrepreneurs, business owners, and

management teams. Our principals have a strong legacy and long history of owning and building businesses

(including Hyatt Hotels, The Marmon Group, Transunion, The Parking Spot, and Vi), and our organization is

differentiated by a significant and permanent capital base, speed and certainty of closing transactions, flexibility

with respect to investment structures, and a deep network of strategic resources. The firm seeks to partner with

like‐minded business owners, management teams, and entrepreneurs in established, profitable, and growing

businesses. PSP typically invests $15‐100M per transaction in businesses with $5‐25M of operating cash flow.

The firm’s industry verticals of interest include business services, niche manufacturing and value‐added

distribution, and food and agribusiness.

Business services

 Facilities and commercial services

‐ Facilities and maintenance management ‐ Environmental services

‐ Logistics and transportation services ‐ Document management

‐ Testing, inspection and certification  Professional services

‐ Marketing services ‐ IT services

‐ Data analytics

‐ Education and training services ‐ Other tech‐enabled services  Route‐based services

 Specialty finance, insurance and insurance services, and collections

Niche manufacturing and value‐added distribution

 Mission‐critical, highly‐engineered and/or branded product manufacturers with demonstrated history of

product quality, customer loyalty, and pricing power

 Value‐added distributors that provide further processing (finishing, kitting, assembly) and/or unique

channel relationships, technology, and fulfillment solutions to its customers and suppliers  Sub‐sectors and end‐markets of interest include:

‐ Building products (residential and non‐residential) ‐ Flow control (pumps and valves)

‐ Sensors and controls

‐ Precision machined/fabricated components ‐ Branded specialty application products

‐ Commercial/Industrial Energy Efficiency and Building Automation / Control ‐ Refrigerated warehousing

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Food and agribusiness

 Food ingredients and additives

 Branded and private label food manufacturing  Health and wellness focused food businesses  Fast casual restaurant concepts or franchisees  Agronomic inputs/specialty crops

 Specialty/niche food packaging

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The

Vistria

Group

www.vistria.com

Overview

The Vistria Group is a Chicago‐based private equity firm focused on investing in middle market companies in the

healthcare, education, and financial services sectors. Vistria makes control investments in companies that have a

history of positive cash flow and sustained organic growth. Vistria’s team is comprised of highly experienced

partners with significant investing and operating experience with a proven track record of working with

owners/founders in building innovative market leadership companies.

 Education  Health care

 Financial Services (asset light/non‐balance sheet‐related investments)